<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
FOR QUARTER ENDED JULY 31, 1995
--------------
COMMISSION FILE NUMBER 0-15424
-------
VAUGHN COMMUNICATIONS, INC.
-------------------------------------------------------------------------------
(EXACT NAME OF REGISTRATION AS SPECIFIED IN ITS CHARTER)
MINNESOTA 41-0626191
-------------------------------------- ------------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYEE IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
5050 WEST 78TH STREET, MINNEAPOLIS, MINNESOTA 55435
--------------------------------------------------------- -------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
612/832-3200
-------------------------------------------------------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
-------------------------------------------------------------------------------
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST REPORT)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE
ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIODS
THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS, AND (2) HAS BEEN
SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO
---- ----
COMMON STOCK, $.10 PAR VALUE 3,117,819 OUTSTANDING SHARES AS OF AUGUST 31, 1995.
<PAGE>
VAUGHN COMMUNICATIONS, INC.
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements (Unaudited)
Condensed balance sheets - July 31, 1995 and January 31, 1995
Condensed statements of operations - Three months ended July 31,
1995 and 1994; Six months ended July 31, 1995 and 1994
Condensed statements of cash flow - Six months ended July 31,
1995 and 1994
Notes to condensed financial statements - July 31, 1995
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II - OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders
ITEM 6. Exhibits and Reports on Form 8-K
Signatures
Exhibits
- 1 -
<PAGE>
PART 1-FINANCIAL INFORMATION
CONDENSED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
July 31 January 31
----------- ----------
1995 1995
----------- ----------
<S> <C> <C>
ASSETS
Current Assets
Trade accounts receivable less allowance of $455,000 $ 8,610,533 $ 7,287,924
July 31, 1995 and $500,000 at January 31, 1995
Inventories 6,975,813 5,762,279
Other 1,240,511 489,418
----------- -----------
Total Current Assets 16,826,857 13,539,621
Property, Plant and Equipment 22,860,083 16,117,463
Less accumulated depreciation 14,712,473 9,650,652
----------- -----------
8,147,610 6,466,811
Intangible and Other Assets 4,578,863 1,249,939
----------- -----------
$29,553,330 $21,256,371
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 1,313,538 $ 2,440,566
Note payable to bank 5,255,547 4,691,699
Salaries, wages and payroll taxes 270,111 302,123
Current portion of long-term debt and capital lease obligations 2,620,859 1,361,486
Other 2,025,156 736,084
----------- -----------
Total Current Liabilities 11,485,211 9,531,958
Long-term Debt (less current portion) 5,913,388 2,173,662
Capital Lease Obligations (less current portion) 1,484,872 1,109,130
Deferred Taxes 38,870 21,178
Shareholders' Equity
Common stock par value $.10 per share:
Authorized 20,000,000 shares; issued and outstanding July 31, 1995-
3,113,666 shares; January 31, 1995 - 2,832,298 shares 311,366 283,230
Additional paid-in capital 4,793,907 3,576,020
Retained earnings 5,525,716 4,561,193
----------- -----------
Total Shareholders' Equity 10,630,989 8,420,443
----------- -----------
$29,553,330 $21,256,371
----------- -----------
----------- -----------
</TABLE>
Note: The balance sheet at January 31, 1995 has been derived from the
audited financial statements at that date.
See Notes to Financial Statements
- 2 -
<PAGE>
VAUGHN COMMUNICATIONS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 31 July 31
-------------------- ---------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES $14,041,547 $10,377,834 $26,414,962 $20,023,857
COST AND EXPENSES:
Costs of Goods Sold 9,375,570 7,024,234 17,908,716 13,464,938
Selling and Administrative 3,371,856 2,542,308 6,356,604 4,880,985
Interest 376,148 182,173 645,945 329,032
Other (Income) 807 13,215 (7,770) 41,773
----------- ---------- ----------- -----------
13,124,381 9,761,930 24,903,495 18,716,728
----------- ---------- ----------- -----------
Income from continuing
operations before income tax 917,166 615,904 1,511,467 1,307,129
Income taxes 400,000 230,000 645,000 500,000
----------- ---------- ----------- -----------
Income from
continuing operations 517,166 385,904 866,467 807,129
Income (loss) from
discontinued operations
net of taxes -- (2,823) -- 497,338
----------- ---------- ----------- -----------
Net Income $ 517,166 $ 383,081 $ 866,467 $ 1,304,467
----------- ---------- ----------- -----------
----------- ---------- ----------- -----------
INCOME PER COMMON SHARE:
Continuing Operations $.15 $.12 $.25 $.25
Discontinued Operations -- -- - .16
---- ---- ----- ----
Net Income $.15 $.12 $.25 $.41
---- ---- ----- ----
---- ---- ----- ----
</TABLE>
- 3 -
<PAGE>
VAUGHN COMMUNICATIONS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended July 31
-------------------------
1995 1994
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 866,467 $1,304,467
Adjustments to reconcile net income to cash
provided by operations
Gain on sale of discontinued operations -- (554,266)
Depreciation and Amortization 1,499,454 1,041,067
Receivables 63,807 (243,911)
Inventories (647,649) (530,675)
Other Assets (50,574) 105,277
Accounts Payable (1,759,499) (440,116)
Other Liabilities 148,547 (592,296)
----------- -----------
Net cash provided by (used in) Operating Activities 120,553 89,547
INVESTING ACTIVITIES
Additions to Property, Plant, and Equipment (1,164,775) (980,547)
Cash proceeds from sale of business unit -- 800,000
Purchase of Business less cash acquired (5,327,601) --
Other 36,928 12,774
----------- -----------
Net cash used in Investing Activities (6,455,448) (167,773)
FINANCING ACTIVITIES
Repayments of Long-Term Debt and Capital Leases (1,084,944) (668,975)
Borrowings under Revolver 563,848 126,321
Lease Financing of Equipment 609,967 558,055
Increase in Bank Debt 5,000,000 --
Stock Issued in Purchase of Business 1,170,000 --
Other 76,024 62,825
----------- -----------
Net cash provided in Financing Activities 6,334,895 78,226
Increase (Decrease) in cash -- --
Cash and Cash Equivalents at beginning of year -- --
----------- -----------
Cash and Cash Equivalents at end of period $ -- $ --
----------- -----------
----------- -----------
</TABLE>
- 4 -
<PAGE>
VAUGHN COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
July 31, 1995
Note A - Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting only of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month period ended July 31, 1995
are not necessarily indicative of the results that may be expected for the year
ending January 31, 1996. For further information, refer to the financial
statements and footnotes thereto included in the Company's annual report on Form
10-K for the year ending January 31, 1995.
Note B - Discontinued Operations
On March 1, 1994, the Company sold the assets and operations of the operating
unit of the Company involved in the manufacture and sale of flag, float and
display products. The non-contingent selling price of $1,500,000 included
$800,000 of cash and a note receivable of $700,000. The net book value of the
assets sold included approximately $450,000 of inventory, $280,000 of fixed
assets, and $150,000 of accounts receivable. The gain on the sale after
settlement was approximately $554,000. The tax liability on the gain was offset
by capital loss carryforwards the Company has available.
Summarized results of operations data of the discontinued operations are as
follows:
<TABLE>
<CAPTION>
Year Ended
January 31, 1994
----------------
<S> <C>
Net Sales $2,904
Cost of Sales 2,037
Selling and Administrative 722
Other 29
------
Operating Income before taxes 116
Income taxes 43
------
Net Earnings from discontinued operations $ 73
------
------
</TABLE>
- 5 -
<PAGE>
Note C - Acquisition of Centercom
On April 4, 1995, the Company completed the acquisition of all the capital stock
of Centercom, Inc. and Centercom South, Inc. (collectively "Centercom"). The
effective date of acquisition was April 1, 1995, and will be accounted for as a
purchase.
The purchase price was $6,420,000 including $5,250,000 of cash and 180,000
shares of Vaughn Communications, Inc. common stock valued at $1,170,000. In
addition, the selling shareholders of Centercom collectively will be paid
$200,000 a year for seven years under non-complete and consulting agreements.
To fund the transaction, this Company entered into a new $13,000,000 credit
facility with its bank. The new agreement provides for $5,000,000 of long-term
financing to be used for the Centercom acquisition. This long-term debt has
quarterly principal repayments and an interest rate of 1/4% over the prime rate.
The remaining $8,000,000 (at the prime interest rate) revolving credit facility
is to be used to finance working capital. Three million dollars ($3,000,000) of
the revolving credit facility is available for long-term financing to replace
existing debt or finance new equipment purchases, of which $850,000 has been
applied to repay a like amount of Centercom long-term debt.
Centercom is a videotape duplicator with facilities in Milwaukee, Wisconsin;
Chicago, Illinois; and Tampa, Florida. Its sales for the fiscal years ended
June 30, 1994 and 1993 were $8,700,000 and $7,700,000 respectively, while net
income for the same periods was $645,000 and $412,000. The proforma unaudited
results of operations, assuming consummation of the purchase as of February 1,
1994 are as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 31 July 31
------------------ ----------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales $14,041,547 $12,540,996 $28,224,732 $24,439,733
Net Income $ 517,166 $ 367,413 $ 944,115 $ 759,499
Net Income per Common Share $ .15 $ .11 $ .26 $ .23
</TABLE>
- 6 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
Net sales increased 35% in the second quarter of 1995 to $14,042,000, an
increase of $3,664,000 from the second quarter of 1994. For the first six
months, revenues of $26,415,000 were $6,391,000, or 32% greater than the same
period last year. Gross margins in the second quarter increased to 33%,
compared to 31% in the first quarter. For the six months prior, the gross
margin was 32% compared to 33% for the prior year. Operating expenses as a
percentage of sales have remained at 24%, while interest expense for the first
six months has increased by 96% to $646,000, primarily due to additional
borrowings associated with the Centercom acquisition. The Company's tax rate
has increased from 38% in 1994 to 43% in 1995 due to the nondeductability of
certain expenses resulting from the Centercom acquisition. Net income increased
34% in the second quarter to $517,000, while for the first six months net income
increased 7% to $866,000. The contribution each division made to these results
is discussed below.
COMMUNICATIONS DIVISION
The Communications Division's net revenues for the second quarter of 1995 were
$11,742,000, a 49% increase over last year's second quarter. For the first six
months revenues were $21,822,000, a 40% increase over the previous year. The
revenue increase is due to the inclusion of revenue from Centercom, which was
acquired April 1, 1995 (See Note C) and a 19% increase in growth from
preexisting operations.
Gross Margins as a percentage of sales increased from 31% in the first quarter
of 1995 to 34% in the second quarter. The improvement reflects management's
efforts to offset material cost increases by selectively increasing prices to
its customers and by implementing cost containment programs. For the first six
months of 1995, the gross margin was 33%, the same percentage as the comparable
period last year.
Additional costs associated with the acquisition of Centercom have offset the
Company's continued leveraging of its fixed operating costs with additional
sales volume. As a result, operating expenses as a percentage of sales has
remained at 25% for 1995 and 1994.
Interest expense increased in the first six months from $190,000 in 1994 to
$490,000 in 1995. The increase was due to higher bank interest rates which
directly affects the Company's borrowing cost, increased levels of borrowings on
the Company's line of credit which is used for operating purposes, and an
increase in the Company's bank term debt of $5,000,000 which was used to finance
the Centercom acquisition.
The increase in sales and the improvement in the gross margins resulted in a 82%
increase in pretax profit in the second quarter from $428,000 in 1994 to
$780,000 in 1995.
PRODUCTS DIVISION
Revenues from the Products Division were $2,300,000 in the second quarter of
1995, an 8% decrease from the previous year. For the first six months of 1995
revenues were $4,593,000, a 4% increase.
Gross margins as a percentage of sales have declined for the first six months
from 32% in 1994 to 30% in 1995 due primarily to increases in the cost of raw
materials. Offsetting this decrease in gross margins was a slight decrease in
operating expenses. Operating expenses as a percentage of sales decreased from
25% in 1994 to 23% in 1995.
These factors result in pretax income remaining relatively flat for the first
six months at $267,000 in 1995 compared to $264,000 in 1994. For the second
quarter, the decrease in sales resulted in a 34% decrease in pretax profit from
$216,000 to $143,000.
- 7 -
<PAGE>
DISCONTINUED OPERATIONS
The discontinued operations resulted from the Company's sale of the operating
unit involved in the manufacture and sale of flag, float and display products.
The sale was completed on March 1, 1994 and the net gain on the sale was
approximately $554,000.
ACQUISITION OF CENTERCOM
On April 4, 1995 the Company acquired the capital stock of Centercom, Inc. and
Centercom South, Inc. (collectively "Centercom"), a videotape duplicator with
facilities in Milwaukee, Wisconsin; Chicago, Illinois; and Tampa, Florida. The
purchase price was $6,420,000 including $5,250,000 of cash and 180,000 shares of
Vaughn Common Stock valued at $1,170,000. In addition, the selling shareholders
of Centercom will be paid $200,000 a year for seven years under non-compete and
consulting agreements.
For the fiscal years ended June 30, 1994 and 1993, Centercom had annual sales of
$8,700,000 and $7,500,000 respectively, and net income of $649,000 and $415,000.
The cash consideration was made available under a new credit agreement with the
Company's bank. The new agreement provides for $5,000,000 of long-term
financing to be used for the Centercom acquisition. The note has quarterly
principal payments of $250,000 commencing July 1, 1995 and an interest rate of
1/4% over the prime rate. In addition, the agreement provides for a revolving
credit facility of up to $8,000,000 (at the prime interest rate) to be used to
finance working capital. Three million dollars ($3,000,000) of the revolving
facility is available for long-term financing to replace existing debt and to
finance new equipment purchases. Of this amount, $850,000 was applied to repay
a like amount of Centercom long-term debt. The interest rate on the long-term
financing is 1/2% over the prime rate.
LIQUIDITY AND SOURCES OF CAPITAL
The Company generated approximately $120,000 of cash from operating activities
in the first six months of 1995. This is consistent with the amount generated
in the first six months of 1994.
Approximately $6,500,000 was used in investing activities for the six months
ended July 31, 1995. The largest portion of cash used was for the acquisition
of Centercom (see discussion above). The Company used the bank line of credit
to provide $5,000,000 for the acquisition and approximately $560,000 for working
capital needs.
The Company's principal sources of liquidity continue to be operating income,
long-term borrowing secured by specific equipment, and its revolving credit
facility. At July 31, 1995, approximately $1,835,000 of this facility was
available and the Company believes that the liquidity provided by the sources
described above will be adequate for its immediate foreseeable needs.
- 8 -
<PAGE>
PART II - OTHER INFORMATION
VAUGHN COMMUNICATION, INC.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders of Vaughn Communications, Inc. (the
"Company") was held June 20, 1995. The Company's Board of Directors solicited
proxies for the Meeting pursuant to its Proxy Statement dated May 19, 1995 (the
"Proxy Statement") and in accordance with Regulation 14 under the Securities
Exchange Act.
The following proposals, described in the Proxy Statement, were presented to the
Shareholders and approved as follows:
1) Board nominees Jeffrey Johnson, Laurence F. LeJeune, and Harold G.
Wahlquist were reelected by plurality vote (as set forth below) to serve as
members of the Company's Board of Directors for three-year terms expiring
at the 1998 Annual Meeting of Shareholders, and Robert Harmon for a one-
year term expiring at the Annual Meeting of Shareholders in 1996, and until
their successors are elected and have qualified. There was no solicitation
in opposition.
Votes Votes
For Withheld
----- --------
Robert Harmon 2,599,900 4,505
Jeffrey Johnson 2,601,205 3,200
Laurence F. LeJeune 2,600,905 3,500
Harold G. Wahlquist 2,601,105 3,300
The remaining members of the Board of Directors were not elected at the 1995
Annual Meeting. Messrs. Roger F. Heegaard and William D. Smith continue to
serve terms expiring at the 1996 Annual Meeting of Shareholders; Messrs. Rodney
P. Burwell, Michael R. Sill and E. David Willette continue to serve terms
expiring at the 1997 Annual Meeting of Shareholders; and until their successors
are elected and have qualified.
2) By the affirmative vote of 1,439,829 in favor and the negative vote of
108,714 against, with 27,309 abstentions, the Shareholders approved
adoption by the Company of its 1995 Stock Option Plan which was previously
adopted by the Board of Directors on April 18, 1995. The Plan provides for
the issuance to selected management and key employees of up to 200,000
shares of authorized but unissued Common Stock pursuant to incentive stock
options under Section 422 of the Internal Revenue Code and/or nonstatutory
stock options not qualifying thereunder..
The shareholder actions summarized above are described in further detail in the
Proxy Statement which is filed as Exhibit 22 to this 10-Q Report.
- 9 -
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following is a list and Exhibit Index of the Exhibits filed
herewith.
NO. DESCRIPTION
(11) Computation of earnings per share
(22) Copy of Proxy Statement dated May 19,
1995 for the Company's Annual Meeting
of Shareholder's held June 20, 1995
incorporated by reference to filing thereof
on May 17, 1995
(27) Financial data schedule
(b) Reports on Form 8-K
During the quarter ended July 31, 1995 for which this
Form 10-Q is filed, the Company did not file with the
Securities and Exchange Commission any current reports
on Form 8-K
On April 19, 1995 (amended by Amendment No. 1 thereto June 14,
1995) the Company filed with the Commission a report on Form 8-K
reporting its acquisition of Centercom which occurred on April 4,
1995.
- 10 -
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto authorized.
Vaughn Communications, Inc.
----------------------------------------------------
Date
----------------- -----------------------------------
M. Charles Reinhart
Secretary
Date
---------------- -----------------------------------
M. Charles Reinhart, Controller
(Principal Accounting Officer)
- 11 -
<PAGE>
VAUGHN COMMUNICATIONS, INC.
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
July 31 July 31
---------------- ------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
PRIMARY:
Average shares outstanding 3,019,676 2,778,194 3,073,876 2,799,367
Net effect of dilutive stock options
based on the treasury stock method
using average market price 462,475 409,143 439,267 396,464
---------- ---------- ---------- ----------
TOTAL 3,482,091 3,187,337 3,513,143 3,195,831
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Income from continuing operations $ 866,467 $ 807,129 $ 517,166 $ 395,904
Income (loss) from discontinued
operations (net of tax benefit) -- 497,338 -- (2,823)
---------- ---------- ---------- ----------
Net Income $ 866,467 $1,304,467 $ 517,166 $ 383,081
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
PER SHARE AMOUNTS:
Income from continuing operations $ .25 $ .25 $ .15 $ .12
Income from discontinued operations -- .16 -- --
------ ------ ------ ------
$ .25 $ .41 $ .15 $ .12
------ ------ ------ ------
------ ------ ------ ------
FULLY DILUTED:
Average shares outstanding 3,019,616 2,778,194 3,073,876 2,799,367
Net effect of dilutive stock options
based on the treasury stock method
using the quarter-end market price
if higher than average market price 505,408 409,143 486,985 396,501
---------- ---------- ---------- ----------
TOTAL 3,525,024 3,187,337 3,560,861 3,195,868
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Income from continuing operations $ 866,467 $ 807,129 $ 517,166 $ 385,904
Income (loss) from discontinued
operations (net of tax benefit) -- 497,338 -- (2,823)
---------- ---------- ---------- ----------
Net Income $ 866,467 $1,304,467 $ 517,166 $ 383,081
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
PER SHARE AMOUNTS:
Income from continuing operations $ .25 $ .25 $ .15 $ .12
Income from discontinued operations -- .16 -- --
------ ------ ------ ------
$ .25 $ .41 $ .15 $ .12
------ ------ ------ ------
------ ------ ------ ------
</TABLE>
EXHIBIT 11
- 12 -
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> JUL-31-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 9,065,533
<ALLOWANCES> 455,000
<INVENTORY> 6,975,813
<CURRENT-ASSETS> 16,826,857
<PP&E> 22,860,083
<DEPRECIATION> 14,712,473
<TOTAL-ASSETS> 29,553,330
<CURRENT-LIABILITIES> 11,485,211
<BONDS> 7,398,260
<COMMON> 311,366
0
0
<OTHER-SE> 10,319,623
<TOTAL-LIABILITY-AND-EQUITY> 29,553,330
<SALES> 26,414,962
<TOTAL-REVENUES> 26,414,962
<CGS> 17,908,716
<TOTAL-COSTS> 17,908,716
<OTHER-EXPENSES> 6,348,834
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 645,945
<INCOME-PRETAX> 1,511,467
<INCOME-TAX> 645,000
<INCOME-CONTINUING> 866,467
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 866,467
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
